How to develop your virtual simulator presence and break even.

1. vBusiness Simulator Strategy 13/04/2011 1

2. Innovirtua Program Phase 1 – Making the project reality Phase 2 – Infrastructure and Logistics Phase 3 – Marketing and Value Added Phase 4 – Costings Phase 5 – Breaking Even Phase 6 – Sustainable Development 13/04/2011 2

3. Reality Check 3 layers of IS Practice Logistics Streams Revenue Streams Value Streams Influence Diagram Analysis Strategy Outline 13/04/2011 3

4. 3 layers of IS Practice 13/04/2011 4

5. Logistics Streams Framework for a MMOW Economy 13/04/2011 5

6. Business Models Market Exchange – a B2B hub which facilitates business to business transactions Business Trading Community – enables market participants to exchange information and communicate with one another Buyer Aggregate/Virtual Mall – creates strategic partnerships and purchasing/development consortia so as to increase power of buyers. Creates external potential of retailers. Classifieds – Sim provides a space for advertisements for the sale of goods and services Metamediary – provides transaction clearing services Search Agent/Bounty Broker – A firm provides personalised shopping or information services by means of intelligent agents, a premium is paid by customers for knowing where to find items. Matchmaker – search agent for B2B activities 13/04/2011 6

7. Portal Theory The sim will provide users with content services or product, this attracts users to the sim. Generalised Portal – an environment that offers broad and diffuse access to the community (Linden Labs) Personalised Portal – Generalised Portal which is customisable creating high switching costs (Content Creators) Specialised Portal – focused portal that creates a narrow community (Commercial Interests and 3rd parties) 13/04/2011 7

8. Production vBusiness allows producers and service providers to sell directly to users and customers without the use of an intermediary. This reduces costs through raising margin potentials. They can also learn about their potential markets by having direct contact with them, allowing a move towards mass customisation. Economies of scale and of learning are an important ingredient of success for potential residents and partners of BusinessLinksims. The drawback is that intermediaries may glean knowledge of producer activities at an early stage and use vBusinessmethhods to undermine and compete very quickly. By installing a community culture between trusted parties, we will be able to increase the rate of development whilst decreasing the time it takes for intermediaries to compete in new markets. 13/04/2011 8

9. Production In this we need to attempt to strike a balance of a number of producer types. Manufacturer-Direct – a firm which produces tangible, physical product directly to users (probably a low number, if more than one in different markets) Content Provider – producer of digital products (movies, software, music, avatar facilitators, all relevant content welcomed) E-procurement – buying consulting services, materials or subcomponents through vBusiness means (see value chain integration) Network Utility Provider – provides software that supports vBusiness applications (eg. Linden Labs, one per grid) Brand Integrated Content – a firm which attempts to integrate advertising, branding and products or services more fully through vBusiness means (Business Link of which we only have one primary, see value chain integration) 13/04/2011 9

10. Brand Integrated Content Customers usage of BIC production is metered and so they pay as they go. Application Service Providers can be used as an example of this business model. There are 7 subtypes. Service Providers – sells services to individuals (Sim Developers) B2B Service Provider – sells services to businesses (kzero, Clever Zebra) Value Chain Service Provider – uses vBusiness methods to provide logistics for one specific piece of the value chain (individuals within the community) Value Chain Integration – uses vBusiness methods to integrate multiple links in the value chain with a possibility of exploiting the information flow between them (Business Link) Collaboration Platform Providers – manages collaboration platforms and sells collaboration tools to improve development (what Linden Labs should be, what Business Link should aim to be) Application Service Provider – rents software over the internet (Linden Labs) Audience Broker – collects information on users and uses the information to help target their audience more effectively. (What Tony was always supposed to be, maybe VIO business group?) 13/04/2011 10

11. Revenue Streams There are a few applicable types of revenue generation techniques here: Referral – gain a fee by referring a user to a member of the community Subscription – a common billing method whereby a fee is charged periodically in return for services. An attractive approach as variable costs are low, also common for content creation. Fee-for-Service – similar to subscription. However instead of paying periodically, customers pay for what they use. Online Content Providers – within the commerce layer, deriving revenue from advertising or subscriptions Online Digital Retailers – revenue from markup on production Online Broker – revenue from commission or referral Online Market Makers – revenue from commission Application Service Providers – revenue from a fee for software service 13/04/2011 11

12. Business Process Redesign 13/04/2011 12

13. Value Streams 13/04/2011 13

14. vBusiness Influence Diagram 13/04/2011 14

15. vBusiness Strategy Outline 13/04/2011 15